Shares in Scotgold Resources dropped seven per cent on Friday on news it has issued another 36.6 million new shares following conversion of loan notes.

Scotgold, which raised another £500,000 from shareholders last month in another discounted share issue, said it issued 36,666,667 fully paid ordinary Scotgold shares on converted notes held by Alexander Littlejohn, Richard Harris and Golden Matrix Holdings Pty Ltd which were previously approved by shareholders in 2014.

The loan notes were issued followed an under-subscribed rights issue in 2014 which left a shortfall of 373.6 million shares.

The new shares will swell the ordinary shares in issue 2.3 per cent to 1,536,940,881 ordinary shares with voting rights, with the new shares expected to be admitted to trading on September 8.

The move to de-list from the ASX followed a discounted share issue placing on August 4 of 62.5 million new shares in a bid to raise around £500,000 before expenses, which the company said would help fund an ongoing Bulk Processing Trial (BPT) of ore already extracted from its Cononish Gold and Silver Project in Argyll.

Approximately 7,000 tonnes of ore are currently stockpiled on the mine 'platform' at Cononish.

The company reported in early August it has poured its first gold from the Cononish BPT, targeting between 400 and 600 ounces in the six-month feasibility study.

In March Scotgold raised around £500,000 from a new share placing , and weeks later warned it would need to raise further capital from shareholders or enter into a sale or joint venture to meet a AUD$1.6 million (£840,000) convertible loan note issued in 2014 and due in September 2016.

The company's auditors also noted in a first-half update the “existence of a material uncertainty that may cast significant doubt about the group's ability to continue as a going concern” if the company was unable to raise new funding or enter into a joint venture or sale of assets to raise finance.